Almost by accident recently, I found myself at what is surely the 15th wonder of the world, which I relate here for history. Long after the world descends into nuclear winter, the remembrance of this place will inspire myths of toy heaven, labyrinths of many rooms, and santa claus.
30 years ago, YiWu China was a tiny little farming village outside Hangzhou. I was visiting the area for other reasons, but upon hearing about the “product mall”, I decided to go and take pictures. Today YiWu holds the largest product marketplace in the world (by a long shot). The main product “mall” is 15 million square feet; there are several other product malls. The main one went from 4.5 to 15 million in just the last few years, and is undergoing another big expansion by 2008. It is difficult to imagine the scope of the place without visiting, but here is a quick virtual tour.
No longer a small farming village, it has an airport and 6 or 7 international hotels. The tower in back of the photo is a Best Western – Best Western in China is actually quite luxurious; and far more comfortable than most Chinese hotels for foreigners. The whole city is designed for foreign buyers.
Another stretch of the same mall.
This is just a foyer attached to the front. You can see through the windows left and right as the cubes stretch off the camera.
The tunnels stretch endlessly forward, left, and right. Each cube is smaller than a shipping container, and hawks the wares of one vendor or supplier. Rows and stacks of cubes, each one packed with toys and a girl to take orders.
Here is one guy’s description of YiWu, which gives some idea.
Note that he is personally vested in selling his massage chairs from a different city, and I saw many such chairs in YiWu – so he will soon be out of business. This is perhaps why he makes some negative and inaccurate comments about YiWu (and he gets his information from another foreigner); but overall it gives a good picture. Most of the foreigners there are buyers looking for nothing but a low price. Primarily Russian, Arab, Indian, and so on (places with expansion of second-stage manufacturing) who are probably pissed about being sent to YiWu to do business. This could explain expreference’s negative comments about attitude. In actuality, the girls seem to spend their time hanging out, talking, playing “da di”, and dozing. They’re quite friendly to tourists and families with money to spend.
In addition, he’s speculating about this area being based purely on “cheapness”, but that still doesn’t explain the location far inland from the port. This area is close to Hangzhou, which has always been the center of Chinese commerce. When Marco Polo visited China, he exclaimed that the amount of commerce in Hangzhou was unimaginable to people back in Europe – indeed it was the largest city in the world and the largest center of commerce for a long time. In addition, this has been for thousands of years a primary farming center for China – this area is resource-rich, so farmers in this area have always been self-sufficient. They have been businessmen for thousands of years. While the other areas of the country have fishermen, laborers, bureaucrats, and academics; this is the area that has always been about business/farming.
It is pretty simple – if you are a businessman, you want to be near your family rather than in Shenzhen, Guangzhou, Beijing. The stretch from Hangzhou to Shanghai (the port) is nothing but factories. Many have turned their farmland into factories, and many more have pushed the factories far out to where the laborers are, and simply have factory HQ sitting on the land near Hangzhou. What has happened is they have seized the front-end of the value-chain, which is selling the product to foreign buyers. As more product is sold through here, the pull is for more product to be sold, and it’s a snowball effect. Now a Chinese manufacturer would be crazy to try to sell product to foreigners without selling through YiWu. Here is a small sample of YiWu selling through Alibaba storefronts.
YiWu specializes in one part of the B2B chain – specifically in finished product, and in parts for manufacture of finished product – and specifically in stuff that is attractive to a large number of buyers. That is, you can find top quality massage chairs, robotic toys, down to 20 different specialized factories for keychains – but you won’t find a manufacturer of a specific type of platen that would only be used in manufacture of Xerox copiers.
This is the category of manufacturing where China currently dominates the world. 90% of the toys in the world come from China now, and you can go see them all by flying to YiWu and staying at the Best Western.